12 Nov Affordable Care Act Update: IRS Extends ACA Reporting Deadline and Good-Faith Relief from Penalties
Setnor Byer Insurance & Risk
This seemingly endless year is almost over…finally. That means it’s time for Applicable Large Employers (ALEs) to start focusing on the Affordable Care Act’s annual information-reporting requirements. Fortunately, the Internal Revenue Service extended the deadline for ALEs to furnish 2020 information statements to employees. However, the deadline for ALEs to file information returns with the IRS has not been extended.
Applicable Large Employers, which are generally employers with 50 or more full-time or full-time equivalent employees in the previous year, must do the following to comply with the ACA’s annual reporting requirements.
Furnish Information Statements to Employees. The IRS extended the deadline to furnish 2020 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) to employees from January 31, 2021 to March 2, 2021. This is the sixth consecutive year the IRS has extended this deadline.
File Information Returns and Transmittals with the IRS. Each 2020 Form 1095-C must also be filed with the IRS on or before February 28, 2021 (March 31, 2021, if filed electronically). The IRS did NOT extend this filing deadline. However, employers may request an automatic 30-day extension by filing Form 8809 before the ACA filing deadline.
The IRS also extended the good-faith relief from penalties that may be levied against ALEs for failing to comply with the ACA’s filing and furnishing requirements, which can be up to $280 per form. To be eligible for this relief, employers must make a good-faith effort to comply. In determining good faith, the IRS will consider whether reasonable efforts were made to prepare the required reports.
It’s important to note that this relief applies to forms with missing or inaccurate information. ALEs that fail to timely file or furnish the required reports are not eligible. According to the IRS, this is the last year they intend to provide good-faith relief from the ACA’s penalties.
Please contact us if you would like to learn more about ACA-compliant group health plans.